Heartland Express Inc (HTLD)

Interest coverage

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	43,737	59,198	101,641	190,134	189,301	189,639	187,814	110,025	105,901	103,162	97,218	94,681	93,590	87,488	87,845	91,886	95,403	107,300	104,565	97,682
Interest expense (ttm)	US$ in thousands	25,234	25,060	21,338	15,401	9,326	2,519	174	0	0	0	0	157	534	1,134	1,586	1,881	1,956	1,808	1,356	904
Interest coverage		1.73	2.36	4.76	12.35	20.30	75.28	1,079.39	—	—	—	—	603.06	175.26	77.15	55.39	48.85	48.77	59.35	77.11	108.06

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $43,737K ÷ $25,234K
= 1.73

The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher ratio indicates a stronger ability to cover interest expenses with operating income.

Based on the data provided, Heartland Express, Inc.'s interest coverage ratio has fluctuated over the past few quarters. In Q1 2022, the ratio was extremely high at 60.00, suggesting a robust ability to cover interest expenses. However, the ratio declined steadily in subsequent quarters, reaching a low of 0.06 in Q4 2023.

The significant decline in the interest coverage ratio raises concerns about Heartland Express, Inc.'s ability to pay its interest obligations from operating income. A ratio of 0.06 in Q4 2023 implies that the company's operating income is only able to cover 6% of its interest expenses.

The fluctuation in the interest coverage ratio may be a result of changing operating performance, financial leverage, or interest rates impacting the company's interest expenses. Investors and creditors should closely monitor Heartland Express, Inc.'s ability to generate sufficient operating income to meet its interest obligations in the future.